Wednesday, 4 February 2004

Ceisteanna (177)

Liz McManus

Ceist:

267 Ms McManus asked the Minister for Health and Children if he will provide the text of his Department's letter of determination to the North Western Health Board for the years 2003 and 2004; and if he will make a statement on the matter. [3321/04]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Minister for Health and Children)

The text is as follows:

Letter of Determination 2003

Mr Pat Harvey

Chief Executive Officer

North-Western Health Board

Manorhamilton

Co Leitrim

5th December 2002

Determination of Health Expenditure for 2003

Dear Mr Harvey

1. Introduction

I am writing to advise you of the Minister's determination of health expenditure for your Board for 2003 underSection 5 of the Health (Amendment) (No. 3) Act, 1996 (referred to in this letter as the Act) and your Board's revised determination for 2002.

2. Funding Arrangements 2003

The Minister wishes to advise you that, as agreed by Government, there will be no consideration given to a Supplementary Estimate for Health and Children in 2003, without exception.

Therefore, the funding advised to you in this letter, together with any additional funding which may be advised to you for specific issues during the year, will represent the total funding available for services in 2003. Your Board should provide an appropriate contingency sum to cover unexpected issues or pressures, which may arise during the year.

It is essential that you inform agencies funded by your Board of these revised arrangements.

3. Basic Funding for 2003

It has been decided by Government that funding of the Health and Children services within 2003 Estimates reflects anExisting Level of Service (ELS) principle and not, as in the past, a No Policy Change principle.

Under the ELS arrangement, funding will reflect the cost in 2003 of approved services put in place for 2002. It follows, therefore, that where the Board is operating in excess of approved levels or where higher levels of services cannot be sustained through efficiency measures, the ELS funding will not be capable of maintaining such service levels in 2003. It is essential that this factor is fully taken into account when developing your Board's service plan.

Equally important is the need to align your Board's payroll and employment numbers with the ELS funding principle. Any corrective action required here should be put in train immediately in order to secure the proper base for 2003. These issues apply equally to agencies funded by your Board.

4. Approved Expenditure Level for 2003

The level of non-capital expenditure for 2003 (i.e. gross expenditure less minor income) determined for your Board is €431.037 million.

When comparing this figure with your Board's net expenditure in 2002, account should be taken of the once-off expenditure in 2002.

Your Board's revised level of non-capital expenditure for 2002 is €418.987 million (including the 2002 Supplementary Estimate).

Outline details of the funding for services are set out at Appendix One. The approved expenditure level for 2003 notified to you above includes provision for technical adjustments of:

Non-Pay inflation factor of 2.8%

The full year cost of 4% final phase of PPF

A reduction for the 1% lump sum

Your Board's service plan should be drawn up within the parameters above for the year 2003.

5. Funding of Initiatives Under Health StrategyQuality and Fairness

It is clear that the system faces a year which requires a co-operative approach across all professions and disciplines to maintain services and service quality. Nevertheless, there will be opportunities to continue to advance the Health Strategy in the context of the funding now available. Specifically, the Government has provided funding to commission the 709 beds announced in 2002, continue to respond to pressures in cancer services and fund the National Treatment Purchase Fund initiative at the 2002 original level of €30m. The Minister is confident that the ELS funding base for 2003 will continue to advance the Strategy objectives of a patient focused service, deliver greater equity in service provision and secure efficiency gains in the use of resources. In developing the service plan, your Board is requested to seek opportunities to advance the Strategy objectives as appropriate.

6. Control of Expenditure and Management of Service Plan

Given the task facing Departments and their agencies in 2003 in managing the Exchequer spending and the uncertain economic climate, the Minister wishes to emphasise the critical importance of control on spending and in the management of the delivery of services. While the Minister is acutely aware of the responsibility of both the Board members and the Chief Executive Officer in this regard, he is equally conscious of the contribution to this vital task made by local budget holders and wishes that they too are made fully aware of the task ahead.

Therefore, you are asked to ensure that throughout 2003 appropriate arrangements and structures are in place to ensure:

—local accountability for and control of financial budgets, linked to realistic service delivery plans, with delegated authority to amend service operational plans and thereby spending when and where necessary;

—that, in regard to acute hospitals, a monthly profile is provided in the Operational Plan setting down projected costs and activity by specialty in each hospital or by Department in hospitals if breakdown by specialty is not available

—that this also be set down for care groups and the main programmes in the non-acute area; monthly reporting to the Board and to the Minister on the progress of spending, service plan delivery, employment controls, the impact of actions taken to address emerging difficulties and the affect of these actions on the service plan;

—continuous controls on spending, including capital spending, cash and working capital;

—similar controls and management arrangements are operated by agencies funded by the Board.

7. Reporting on Expenditure and Service Plan

The Minister for Finance has introduced more stringent reporting arrangements on Ministers for 2003, in order that Government can be fully informed on the progress of spending, the issues giving rise to emerging pressures within the system and, in particular, the remedial action taken to correct the situation. In addition, the Minister for Finance intends to publish cash and expenditure profiles of Departments, as submitted, and to monitor these against actual results.

In order to allow the Minister of Health and Children to be in a position to comply with the revised reporting arrangements, the following information sets and timeframes are to be put in place by your Board;

—Cash Profile; you are requested to prepare a monthly cash profile, aligned to your service plan expenditure, taking fully into account the trends in expenditure and service delivery across the 12 months, consistent with the overall total cash advised. You should note that this profile will form the basis on which cash will be made available to you on a monthly basis throughout 2003. The profile must provide for the full release of funding included in your Board's determination for the GMS, including funding due in relation to 2002, if any. In addition, funding of voluntary and other agencies providing services to your Board must be fully included within the monthly profile.

The cash profile must be submitted by 3rd January 2003 for review by the Department before submission to the Minister for Finance.

—IMR; having regard to the circumstance facing the system in 2003 and the absolute necessity to support budget holders, the CEO and his management team with information to allow the system to respond speedily and effectively to emerging events, the provision of timely and accurate information, both financial and non-financial will be crucial to the successful management of resources throughout the year.

In the first instance the IMR will allow the CEO and his management team and local management to take advantage of opportunities arising and where necessary provide the capability to address emerging difficulties at the earliest possible time.

The IMR, together with the CEO's commentary and the quarterly PI reports, are equally important within the Department in that they inform service and support units on the progress of the service delivery and the specific pressures within the system as experienced by individual Boards/Authority. In turn, they allow the Minister to be informed regarding the services and to appraise his colleagues in Government regarding progress within the system overall. This is vitally important in the context of accountability for resources secured and to support the case for continued investment.

In order to accelerate the use of the IMR at all levels as a management tool, it is essential that your Board make the necessary arrangements to provide the IMR with commentary to the Department by the 20th of the following month.

8. Accountability of Chief Executive Officer

You will be aware that section 9, Health (Amendment) No. 3 Act, [1996.] places specific responsibilities on a chief executive officer in regard to service plans and financial accountability. In that context it is important that the chief executive officer takes personal responsibility in regard to the reporting arrangements set out in this Letter of Determination on activity, personnel and financial information. It is critical that the process of reporting to the Department includes a clear statement by the chief executive officer of the immediate steps he is taking to manage emerging difficulties in these areas.

Where a CEO delegates to an identified officer of the health board the authority, responsibility and accountability for specific services, the officer must be made explicitly aware by the CEO of what is being delegated. The CEO must take personal responsibility for ensuring that this is the case. However, this does not dilute, in any way, the CEO's functions under the 1996 Act, including those under Section 9. The parameters of control and reporting described in this Letter of Determination apply equally to the CEO and those other officers of the Board to whom authority, responsibility and accountability have been delegated. That delegation must ensure that the officers have the authority to act immediately to address problems which could adversely affect the budgetary position, including unfunded activity increases and unapproved increases in staffing numbers.

9. Indebtedness Level

Section 8 of the Act requires the notification of the approved level of indebtedness, arising from this determination. This figure is €34.483 million for your Board in 2003. A more detailed letter on indebtedness and working capital requirements will issue shortly. The provisions of the Prompt Payment of Accounts Act, 1997 should be strictly adhered to.

10. Service Plans

10.1 Submission of Service Plan

Under the provisions of Section 6 of the Act, each health board must adopt and submit a service plan to the Minister. The service plan is the benchmark against which your Board's expenditure, output and progress will be assessed during the year. In accordance with sub-section (6) of this section of the Act, health boards are required to take account of the policies and objectives of the Minister, and of the Government.

It will be necessary to complete all matters relating to your Board's service plan as a matter of urgency and, in any event, not later than 42 days after receipt of this letter.

Under the provisions of Section 9 of the Act, the CEO is responsible for the implementation and where necessary, the amendment, of the Service Plan on behalf of the Board. In this regard, the Minister is anxious that this process is seen to be driven by each CEO and their management team, and where difficulties arise during the year, that immediate corrective action is taken to bring the Service Plan back into line.

The Board service plan should be submitted in hard copy to the Minister. In addition, the plan should be e-mailed as one document (in PDF format) to the e-mail address:serviceplan@health.irlgov.ie.

10.2 Format of Service Plan

The structure and format for the 2003 service plan should follow a similar template as in 2002. While referencing Strategy actions, the primary structure of the Service Plan should, as far as possible, deal with services on the basis of the care group structure used in the National set of Performance Indicators.

The format of the Service Plan (in particular the associated financial tables) should lend itself to being reported on in the context of the monthly IMRs and the quarterly Performance Indicator reports. This is essential to allow for ongoing assessment of the service plan delivery

10.3 Content of Service Plan

It is essential that your Service Plan is realistic and achievable. It should reflect and be grounded in the Strategy, referencing all relevant Strategy actions. If the body of the Service Plan is not stated in terms that address Strategy actions, a comprehensive appendix linking the Plan's contents to Strategy actions should form part of the Service Plan. You will be aware that the Minister will be required to report progress to the Cabinet Committee on the Health Strategy and the Service Plans and the above appendix will form the basis of this report in advance of the streamlining process outlined in 10.6.

The available budget must clearly form the basis for the service plan submitted to the Minister. There must be a comprehensive match between resources available to the Boardover the course of the year and the performance/activity levels specified in the service plan to be delivered. This is essential if resources are to be effectively managed at corporate and operational level. However, within the broad policy objectives set by the Minister, your Board has the flexibility to determine its priorities in the Service Plan so as to ensure the optimal delivery of services commensurate with resource availability. It is on this basis that your Board's performance will be monitored and evaluated.

In drawing up the Service Plan, emphasis should be placed on the planned service delivery from the core funding across care groups, programmes and sub-programmes.

In accordance with section 10 of the Act, if your Board anticipates, on the basis of the information now available, incurring any excess or credit on expenditure in 2002, your Board's service plan must clearly include provision for charging the full amount of such excess or credit to the service plan for 2003. An excess expenditure in 2002 must be a first charge on the resources available for 2003. In the case of an excess, your Board should detail, as part of its service plan, how it proposes to recover the excess expenditure in full and bring current expenditure back into line. Any significant excess being brought to account at this stage will,inter alia, raise questions regarding the reliability of your Board's regulatory and reporting systems.

10.4 Documents to accompany your Service Plan

When your Board is submitting its Service Plan to the Minister, please also send a report to the Department setting out your Board's expected performance by reference to the agreed national set of PIs with appropriate commentary to put the PI-based information in the context of the Board's overall service plan. Targets should be stated in terms of the PIs where these are already set in existing policies (e.g. immunisation etc. and for all other PIs where such targeting is possible. This is essential for good monitoring and Plan evaluation.

Please also submit whatever operational details you feel would be helpful in assessing your service plan together with an estimated position for the end of 2002 for your Board in relation to IMR information and also (where possible) PIs. Budgetary statements by care group should accompany or be part of the Service Plan as far as is practicable at this stage.

10.5 Review of Service Plan

Whilst it is intended that the Service Plan be used throughout the year along with IMR and PI reports as a basis to guide the monitoring and evaluation of service plan delivery (and help to identify emerging trends so that action can be taken at the earliest possible time), there will also be periodic formal Service Plan reviews as in 2002. For each review of 2003, a specific report will be required (to complement the IMR and PI returns) elaborating on the position and focusing in particular on bed capacity funding and core service delivery targeted in the Service Plan.

10.6 Development of the Service Planning Process during 2003

The Health Strategy recognises the Service Plan as one of the vital tools in the planning process at regional and national level. Its potential as a sophisticated tool for planning based on strategic objectives shared by all boards is identified. While some work has been usefully carried out in this area through HeBe during the summer, nevertheless a considerable body of work remains to be completed. In order to progress the Health Strategy actions on service planning, a joint Health Board/Department group has been established. During 2003, it is intended that this group will

—Specify an agreed format, content and approach for Service Plans as per Health Strategy Action 70 ensuring most appropriate linkages to unite health strategy information requirements with service planning formats and performance indicators;

—Specify an agreed format, content and approach for 3-5 year Implementation Plans as per Health Strategy Action 71 ensuring most appropriate linkages to service plans, strategies, other policy documents and annual reports;

—Consider how the varied reporting mechanisms (including IMRs, Strategy Stocktaking Reports, PI Reports and New Development Reports) currently in place might best be best developed and streamlined to produce a seamless evidenced based process for monitoring services linking strategy through service plan to delivery.

This conjoint effort will result in a revised service plan model for 2004.

11. Performance Indicators

The Health Strategy emphasises the necessity for service planning and delivery to be based on high quality, reliable and timely information. In this context it is critical that as complete a PI report is submitted by the 20th of the month following on from each quarter together with the IMRs all signed off by the CEOs. The PI Reports should be sent in hard copy to the Secretary General of the Department and electronically toserviceplan@health.irlgov.ie using the agreed template. The PI data together with the IMRs will better enable monitoring and evaluation of the on-going position in relation to your Board's Service Plan. In addition, the commentary (which is essential and vital for plan monitoring) should cover areas where hard quantitative PI information is not available in full or where the quality of the information may not be optimal.

The Department recognises the excellent work that has been carried out in developing and reporting on the national set of PIs and is conscious that these developments are still at a relatively early evolutionary phase and that much further work needs to be done in this regard. The PI reports will be used as an indicative picture of the Board's position in relation to the delivery of its Service Plan. This is to enable both the Department and the Board reach a better shared understanding of the position in monitoring and evaluating the attainment of service plan objectives by the Board in the light of the underlying position taken together with the IMR returns.

12. VFM strategies

12.1 New Technology Assessment

New Technology Assessment has an increasingly central role to play in the use of VFM strategies. This is a complex area, particularly in relation to new drugs and new treatments incorporating new combinations of drugs where assessment information may not be readily accessible. You are asked that every effort be made to seek out assessments of new technologies to guide their introduction so that tighter targeting of the use of technologies, combined with appropriate protocols, will ensure that new technology is employed only for those cases where clear demonstrable benefits exist and resultant costs are justified. In this regard, it is proposed that the health boards and agencies, pending the establishment of the Health Information and Quality Authority, now commence the development of a common approach to the assessment of new technology under the auspices of HeBE.

12.2 VFM Targets

The attainment of better value-for-money through effective and efficient use of resources continues to be a critical objective for all health agencies. The draft IBM health sector procurement strategy report being considered by the CEOs should become central to the delivery of VFM in the non-pay area.

The Government have decided that health boards and agencies must continue to pursue VFM during 2003 and your determination reflects an appropriate amount of a VFM target which is to apply across the boards to both pay and non-pay areas. In developing your approach to achieving that target, you should also take into account possibilities that will emerge from the Procurement Strategy for health services, which is being completed under the aegis of HeBE.

The outcome of VFM initiatives will continue to be enhanced, by the extent to which health agencies work together to share best practice, to maximise joint procurement and materials management. It is critical that all health agencies use the skills and structures now in place to maximise co-operation and actively pursue value-for-money in materials management, particularly in the development of national protocols and contracts. Co-operation in this area is critical. The level of co-operation between boards to achieve greater VFM will be closely monitored by the Department throughout 2003.

In addition, a separate PI report in relation to 2002 using the PIs already in use in this area should be submitted to the Department with the Service plan and quarterly thereafter (signed off and submitted as part of the IMRs for the relevant months). It is intended that the five most important PIs from the draft IBM report when signed off, will replace the existing PIs in this area during 2003. However, both sets of PIs are to be reported on up to and including the second quarterly 2003 Service Plan Review so as to provide continuity.

13. Employment Control 2003

There will be no addition to the employment ceiling currently approved for your Board, given the ELS allocation. In the context of the ELS allocation, your service plan should therefore confirm that employment levels associated with the activity levels set out in the Service Plan for your Board conform to this ceiling.

A series of meetings have taken place with your Board since mid-year, following the results of the 2001 census, to strengthen arrangements for employment control in order to ensure compliance with the approved employment ceiling for 2002, taking account of the Government Decision last June and the review of service plans. The review of the census is now being concluded with the Department of Finance and you will be advised accordingly.

You will be aware that the Minister for Finance indicated in his Budget Statement that a reduction of 5,000 is planned in the numbers employed in the public service over the next three years. Further information is awaited from the Department of Finance regarding the implications of this measure for the Health Service and details will be conveyed to you as soon as they are available. In the interim, the preparation of your Service Plan should be undertaken on the basis of the current authorised employment level.

In 2003, no posts above the authorised ceiling may be filled. In these circumstances, the employment requirements of specific services, consistent with planned activity levels, should be met through the management of your approved employment complement. In order to expedite financial clearance, your service plan should clearly indicate and list medical consultant posts (new, replacement and / or restructured) for which you intend to seek financial clearance during 2003, before making application to Comhairle na nOspidéal.

Revised arrangements are also being introduced in 2003 to strengthen overall central monitoring and control of employment levels. Yours Board's adherence throughout the year to its approved employment ceiling will require to be confirmed on a monthly basis through information furnished in the IMRs. Compliance by your Board with the employment control measures will be monitored by this Department through the IMRs and also by means of quarterly census returns.

Arrangements for formally validating at CEO level the employment information supplied by your Board are those as set out in section 8 above.

Your Board should also make adequate provision for pay costs in 2003, to be met within the existing allocation, having regard to:

—the present numbers employed;

—the appropriate balance between pay and non-pay costs;

—the projected cost of minor claims expected to arise during the year.

14. Development of Human Resource Management and Implementation of the Action Plan for People Management

The Service Plan for your Board should include details of the full range of measures which it is intended will be undertaken by your Board in 2003 to implement the specific actions detailed in the Action Plan for People Management (APPM) and to strengthen the capacity for more effective human resource management in the health service, in line with the objectives set out in the Health Strategy.

15. Social Inclusion

You will be aware of the importance accorded in the National Health Strategy to social inclusion, in particular to Action 18 which has deliverables relating to reducing health inequalities in line with the key targets set out by Government in its review of the National Anti-Poverty Strategy (Building an Inclusive Society Review of the National Anti-Poverty Strategy under the Programme for Prosperity and Fairness).

Social inclusion should be a major consideration in framing the Service Plan and the Plan should set out the way in which the various actions in it address this. Actions to develop services in line with RAPID and CLÁR proposals need to be seen to take effect in 2003. The Service Plan should therefore clearly indicate the actions which further the implementation of these programmes as well as the wider social inclusion agenda wherever possible.

16. Conclusion

To assist your Board to complete the matters addressed in this letter quickly, senior officers of the Department will be available if there are any matters requiring clarification. These queries should, in the first instance, be referred to Dermot Magan, Helen Minogue and Paula Monks, Finance Unit, (01-6354254, 6354293, 6354513) who will co-ordinate the Department's response to all health boards/ERHA. However, it is essential that the cash profile is submitted by the date advised.

The Minister would like to thank you, your Board, and all your Board's staff, for your contribution to the delivery of health care during 2002. He also asked me to acknowledge your co-operation and that of your management team in working closely with the Department, other health boards and other agencies in providing improved health and personal social services. In particular, the Minister would like to thank you and your staff for the support given to the Department during 2002 regarding the work carried out on the Health Strategy. The Minister looks forward to the further progress, which will be made in developing the health services during 2003.

Yours sincerely

Michael Kelly

Secretary General

Appendix to letter

North Western Health Board

Revised 2002 Determination

The revised non-capital Determination for your Board for 2002 is €418.987 million.

2003 Non-Capital Determination

The non-capital Determination for your Board for 2003 is€431.037 million.

Acute Hospitals

Additional revenue funding of €1.725m is being made available in 2003 to support the consolidation of acute hospital services in accordance with the principles outlined in the letter of Determination regarding the provision of existing levels of service.

The detailed application and consequences of this funding should be clearly set out in your Board's Service Plan for 2003.

Bed Capacity

Additional revenue funding (ongoing) of €0.737m is being provided to meet the additional cost in 2003 of 38 beds commissioned by end 2002 in the North Western Region under the Bed Capacity Initiative.

Hospital / Laboratory Accreditation

A sum of €0.033m is being provided to support the development of hospital and laboratory accreditation programmes in your Board's area.

Renal Services

As part of a structured programme of investment in the development of renal services, additional funding of €0.100m is being made available to your Board in 2003.

Pre-hospital/Ambulance Services

Revenue funding of €0.900m is being allocated to the Health Board Executive (HEBE) in respect of the continuing provision by health agencies of pre-hospital emergency care/ambulance services. The application of this funding will be the subject of discussions between HEBE and this Department.

Cancer Services

Additional revenue funding of €1.870m is being allocated to your Board from National Cancer Strategy funding to address service pressures as follows: €1.310m in relation to oncology/haematology services, including oncology drug treatments and €0.560m to ensure adherence to quality standards asset out in the Report of the Sub-Group of the National Cancer Forum on the Development of Services for Symptomatic BreastDisease.

Waiting List Initiative

A sum of €1.800m has been allocated to your board to support the continuation of the Waiting List Initiative. The detailed application of this funding, including the proposed areas to be targeted and the net reductions in waiting lists and waiting times by specialty to be achieved, should be clearly set out in your Boards 2003 Service Plan and will be the subject of further discussion in this context. Particular emphasis should be placed on achieving the target reductions in waiting times for those patients waiting longest for treatment as set out in the Health Strategy. Your Board's plans in relation to the National Treatment Purchase Fund should be included in this context. Further Waiting List Initiative funding may be made available to those agencies who demonstrate the ability to significantly reduce waiting times.

HIPE & Casemix

Casemix

Casemix analysis of costs and activity relating to the hospitals in your Board's area, which are participating in the National Casemix Programme, has resulted in an overall once off positive adjustment of €0.293m as follows:

Hospitals

€m

Letterkenny

0.566

Sligo

(0.273)

TOTAL Once off

0.293

The Casemix Unit of the department will be writing directly to you shortly with full details of the adjustment.

Adjustments should be applied to the hospitals from which the adjustment arises and these details should be clearly identified in your Service Plan.

HIPE/Casemix Staffing

No resources for HIPE/Casemix staffing are being allocated to hospitals within your Board this year, as Boards who gain funding within Casemix may reallocate a portion of that funding, as appropriate, for Casemix Staffing. Casemix Unit will be writing to you directly in this matter.

Letterkenny General Hospital

Exceptional Casemix (base funding) Adjustment

An exceptional negative adjustment in relation to the base allocation for Letterkenny General Hospital, in the amount of (€0.242m) has been agreed by the Casemix Technical Group. The adjustment is in order to regularise the hospital's base funding going forward, following audit. Casemix Unit will be writing to you directly with full details of the adjustment.

Health (Amendment) Act, 1996 (Services for Persons with Hepatitis C)

A sum of €0.102m is being made available to your Board in 2003 in respect of the cost of providing primary healthcare services to those persons who hold a health service card under the Health (Amendment) Act, 1996, including provision for increased activity, services and costs.

Services for Older People

A Total of €1.614m is being provided as follows:

Service

Amount€m

Nursing Home Subvention Scheme

0.400

Increased Demands/Contract rates

0.050

Meals — Increase in grants

0.040

Community Hospital, Killybegs

0.140

Rehabilitation Unit, Letterkenny

0.200

Consultant in Geriatric Medicine

0.160

Home Care Services

0.360

Day Centres/Day Hospitals

0.075

Residential Service Centre, Gweedore

0.045

EMI Services

0.069

To Commence Elder Abuse Programme

0.075

Total

1.614

Palliative Care

The allocation for Palliative Care Services is being made subject to the following:

1. Agreement should be reached with Services for Older People and Palliative Care Division both on the detailed use of this allocation and also the use of previous funding made available in conjunction with the launch of the Report of the National Advisory Committee on Palliative Care. The Regional Consultative and Development Committees for Palliative Care should be consulted, where appropriate, on your Board's plans for the use of this allocation in line with the recommendations of the National Advisory Committee Report on Palliative Care. It is intended that these details be incorporated in your Health Board's Service Plan. It will be necessary to agree in advance with Services for Older People and Palliative Care Division any departure from the aforementioned agreement during the financial year.

2. Your Board will be required to provide Services for Older People and Palliative Care Division with regular updates in advance of the quarterly Service Plan meetings on progress made or expected to be made in the use of the allocation.

3. Where grants are being provided under Section 65 the principles guiding such grants as outlined under Grants to Voluntary/Other Organisations as detailed in the section of this letter dealing with Services for Older People should be applied.

A total of €0.290m is being provided for enhanced medical cover in the North West Hospice (€0.075m), home care services in Donegal (€0.040m) and Sligo/Leitrim (€0.085m) and palliative care nurses in Donegal & Sligo/Leitrim (€0.090m).

Mental Health Services

A sum of€0.650m is being allocated to your Board in 2003 for the continuation of on-going services.

Services to Persons with an Intellectual Disability and Those with Autism

National Intellectual Disability Database

The National Intellectual Disability Database has a vital role in the planning and monitoring of service provision. The timetable for the provision of updated information in 2003 has been notified to each Health Board/Authority. It is vital that this timetable is complied with in order to enable the Health Research Board to complete the necessary validation work and have data available for the Department in the autumn of 2003. It should be noted that there will be no extension of the timeframe in relation to the export of data to the Department and that the Boards / Authority should take whatever measures are required to ensure that this deadline is met.

Additional funding of €0.800m is being provided as follows :

€0.200m is being provided to enhance the health related support services for children with an intellectual disability or autism

€0.600m to meet the full year costs of the 2002 development programme.

Services for People with Physical / Sensory Disabilities

A sum of €0.877m is being made available to your board in 2003 towards core funding of these services as follows:

Agency/Service

Amount €m

Priority service pressures as identified at local level (to include respite, home supports, services for people with significant disabilities, support services for children with disabilities, Aids & Appliances etc.

0.574

Regional Co-ordinator for the Disability Federation of Ireland

0.046

Continued roll-out of the NPSDD (including the possibility of the introduction of a management structure for the NPSDD and the NIDD) once off

0.257

Total

0.877

The sum of €0.260m allocated in 2002 for the purpose of the alleviation of the under-resourcing of the RehabCare organisation is to be distributed in 2003, according to the findings of the Review carried out by the board in respect of voluntary sector service providers in the region.

In 2002 a figure of €0.076m was allocated to your board for the mainstreaming of the FÁS CE scheme. As the future of the CE scheme is currently being reviewed, pending the outcome of this review, monies allocated for this purpose should be used for priority service pressure as identified by your Board.

Rehabilitative Training and Sheltered Occupational Services

Additional revenue funding of €0.308m is being made available to your Board in 2003 for the provision of services for people with disabilities in Rehabilitative Training and Sheltered Occupational Services.

Adult Homelessness

Additional funding of €0.100m is being made available to your Board in 2003 to provide funding for the implementation ofHomelessness An IntegratedStrategy.

Traveller Health

An additional €0.054m has been included in the Board's allocation for 2003 to fund developments under Traveller Health A National Strategy 2002- 2005. The detailed application of this expenditure will require prior discussion with the Board's Traveller Health Unit and the Department's Traveller

Health Policy Unit.

Child Care Services

Additional funding of €0.146m is being provided for the Child Care Services. The details are outlined in the table below.

Service

Amount €m

Special Arrangements

0.050

Youth Homelessness

0.096

Total

0.146

Dental Services

A sum of €0.064m is being allocated to your Board in 2003 to complete the training of 1 dentist for Specialist in Orthodontics qualifications.

Community Audiology Services

Devolution of Community Audiology Service (€0.234m)

Consequent to the devolution of the Community Audiology Service from the Northern Area Health Board of the ERHA to each individual board from the 1st of January 2003, core funding of €0.234m is being transferred to your board for this service. The Northern Area Health Board will therefore cease to administer the national core budget of this service at the end of 2002.

Community Health Services

A total of €0.362m is being provided as follows :

Service

Amount €m

Cervical Cytology Laboratory and Colposcopy Services

0.105

Child Health — Best Health for Children

0.176

Community Ophthalmic Services (Adult) (once off)

0.081

Total

0.362

In addition to the above, funding will be available at a national level for the following:

Influenza and Pneumococcal Immunisation

Up to a maximum of €1m is available (on a once-off basis) at national level in respect of fees payable to General Practitioners for the administration of influenza and pneumococcal vaccine to GMS patients in the "at-risk" category in the event that uptake for the 2002/03 programme exceeds uptake recorded for the 2001/02 campaign. Applications for funding with appropriate supporting documentation should be submitted by 28 March 2003 to Mr Brian Mullen, Principal Officer, Community Health Division.

Childhood Immunisation

In respect of childhood immunisation €2.116m is being made available at national level on a once off basis in respect of specific projects and measures which are designed to improve immunisation uptake particularly in areas of low uptake. Proposed projects / measures should be submitted by the Immunisation Implementation Group chaired by Ms P. Gilheany — HeBE no later thatFriday 31 January 2003.

Strategy for control of Antimicrobial Resistance (SARI)

An additional sum of €0.584m is being provided to fund national initiatives and / or measures recommended by the National SARI Committee in order to facilitate the continued implementation of this strategy. This funding will be allocated in March/April 2003.

Food Safety Control

A sum of €0.193m has been included in your Board's Determination in respect of the Food Control Service.

Tobacco Control

A sum of €0.060m has been allocated for tobacco control. This allocation provides for compliance building and community based tobacco free initiatives by the environmental health service (once off).

General Practice Development Fund

Your board's allocation includes a sum of €0.354m in respect of the full year costs of ongoing developments in general practice. The precise details are as follows:

Service

Amount €m

Primary Care Units

0.156

Service Developments

0.105

GPIT Training

0.028

Vocational Training

0.065

Total

0.354

€0.020m of the monies allotted under the GPIT Training heading should be forwarded to the Irish College of General Practitioners (ICGP) as your Boards contribution to the continuing National GPIT training programme, the balance being in respect of internal support costs which may arise in your Board. Accordingly, I would ask that your Board make arrangements to forward, as soon as possible, the necessary amount to the ICGP.

General Practice Co-operatives funding

A sum of €2.362m is also being provided in 2003 to facilitate out of hours primary care developments. The GMS Division of the Department will be in touch with your Board early in 2003 to discuss the funding of general practice out of hours co-operatives.

Primary Care Strategy

A sum of €0.390m is being provided for the continued development of your Board's implementation project under the Primary Care Strategy. This funding will be released on receipt of confirmation that the additional staff necessary to make up the primary care team have been appointed and that satisfactory progress has been made with the establishment of the project.

A sum of €0.010m is being provided on a once-off basis in respect of administrative support for the sub-group of the Primary Care Steering Group chaired by Mr Tom Kelly, Assistant CEO. The continuation of this allocation in future years will be reviewed in the light of the support requirements of the group involved.

Nursing Issues

A sum of €1.070m once off is included in your Board's 2003 allocation as follows:

Service

Amount €m

Transition to Degree Programme (once-off)

0.060

Pre-registration Nursing Programme (Sponsorship Scheme)(once-off)

0.110

Fees Initiative for Part-Time Nursing Degrees (once-off)

0.200

Fee Support for Specialist Nursing Courses Circ 150/00 and 47/01 (once-of)

0.200

Nurses Pay — Accident & Emergency Circ 25/02 and 34/02 (once-off)

0.500

Total

1.070

Risk Management

A sum of €0.300m has been included in your allocation for the development of the Board's risk management programme. Expenditure under this heading should not be incurred without the specific prior approval of Mr Brendan Phelan of the Department's Medical Indemnity Project Office. With the launch of the Clinical Indemnity Scheme in 2002 the Department attaches a high priority to the development of comprehensive risk management programmes in Health Boards. It is essential, therefore, that the additional funds made available under the heading are applied to risk management. Funds not applied to risk management will berecovered and made available to other agencies.

Development of Human Resource Management and Implementation of the Action Plan for People Management

The Service Plan for your Board should include details of the full range of measures which it is intended will be undertaken by your Board in 2003 to implement the specific actions detailed in the Action Plan for People Management (APPM) and to strengthen the capacity for more effective human resource management in the health service, in line with the objectives set out in the Health Strategy.

In addition to the resources already in place, an allocation of €0.140m is also being provided to your Board in 2003 to support the development of human resources and for the implementation of the Action Plan. The National APPM Implementation Monitoring Committee will identify priorities for the application of this funding in the course of the year.

Expert Group on Medical Laboratory Technicians / Technologists

€0.277m is allocated on an ongoing basis for the continued implementation of the recommendations contained in the Expert Group on Medical Technician/Technologist Grades, including implementation arrangements not yet notified to agencies.

Expert Group on Radiography Grades

€0.209m is allocated on an ongoing basis for the continued implementation of the recommendations contained in the Expert Group on Radiography Grades, including implementation arrangements not yet notified to agencies.

Clinicians in Management

Please submit a report on developments resulting from the funding provided in recent years for the Clinicians in Management Programme. Funding in 2003 will be dependent on progress to date and your agency's proposals for 2003 under this programme. Your submission must also indicate the estimated costs for 2003 and the additional benefits of this programme for service delivery. Your submission must be received by the Personnel Management and Development Unit in this Department no later than 28th February, 2003 for consideration.

Travel and Subsistence

I refer to circular 67/2002 issued on 27 November 2002. Any additional costs involved in the implementation of this circular must be met from within your current approved allocation.

Occupational Health, Safety and Welfare

Funding for occupational health safety and welfare in 2003 for your board's region will be considered in the context of the process being commenced under action 2.1 of the Action Plan for People Management. Any additional allocations in 2003 will also take account of the submissions received from your board.

Revenue Cost of IT

€0.052m has been included in the Determination as a contribution towards ongoing revenue costs arising from information and Communications Technology investments within your Board. Where appropriate, this should be distributed to voluntary agencies on a pro rata basis to the amount of Capital ICT Funding provided in 2002.

GRO Modernisation Programme

The implementation of the new GRO I.T. system to support the registration of life events and the issue of birth, marriage and death certificates will proceed from early 2003. The roll-out programme for this system has yet to be finalised. Funding will be provided to meet the approved additional costs incurred by your Board during 2003 to implement this system. As the level of funding required is agreed with the General Register Office, arrangements will be put in place for draw down of the approved funding.

Health Promotion

A sum of €0.148m is included in your 2003 Determination on a once off basis for projects undertaken by the Health Promotion Department of your Health Board.

Cardiovascular Health Strategy

A sum of €0.800m is being allocated to your Board towards the continued implementation of the Cardiovascular Health Strategy.

Violence Against Women

The sum of €0.020m is included in your Determination for the further development of services for women victims of violence.

Letter of Determination 2004

Mr Pat Harvey

Chief Executive Officer

North Western Health Board

Manorhamilton

Co Leitrim

4th December 2003

Determination of Health Expenditure for 2004

Dear Mr Harvey

1. Introduction

I am writing to advise you of the Minister's determination of health expenditure for your Board for 2004 underSection 5 of the Health (Amendment) (No. 3) Act, 1996 (referred to in this letter as the Act) and your Board's revised determination for 2003.

As you are aware, following on the Government decision of 17 June last, preparations are underway for the introduction of new structures and governance arrangements for the health system. Transition to the new structures will require the enactment of new legislation. The planned date of transfer of responsibility to the new Health Service Executive is January 2005. The health boards and ERHA will therefore retain formal responsibility for managing the system within the existing legislative framework during 2004.

2. 2004 Funding

The funding provided by Government for 2004 includes the Estimate for Health and Children as contained in the Abridged Estimates Volume 2004, together with the funding contained in the 2004 Budget figures. This funding should in overall terms support the broad range of services currently delivered, taking into account the impact of the increased charges and value for money targets as outlined. It is clear, therefore, that the task of managing services within approved parameters in 2004 will again be a challenging one. The experience of your Board during 2003 should provide a strong indication of the areas where pressures can be anticipated in 2004. In preparing the Service Plan and budget, all areas of activity and spend will need critical evaluation so that available resources are targeted at national priority areas and emerging needs as far as possible. Given the dominance of pay cost in overall spend, all staffing allocations and, in particular, premium pay elements should be critically reviewed in this process.

The Minister, conscious of the extra demand placed on particular services in 2003, has taken the deliberate step of prioritising specific services so as to provide some additional protection in the Service Plan. Such services include cancer, renal and services for older people in the main and, together with the additional funding in the Budget for disability services, should add a measurable impact to the planned service provision in these areas in 2004. You are requested to indicate in your Service Plan the specific service volumes planned in these areas in 2004.

3 Planning for 2004 Spending

As in 2003, your Board is advised to set aside a contingency provision to deal with unexpected issues and service pressures arising in 2004. The Minister for Finance has again advised that Supplementary Estimates cannot be anticipated, and your Board will again be expected to manage items such as minor pay, pay related issues and demand-led services from within the notified determination.

4. Approved Expenditure Level for 2004

The level of non-capital expenditure for 2004 (i.e. gross expenditure less minor income) determined for your Board is €495.674m.

When comparing this figure with your Board's net expenditure in 2003, account should be taken of the once-off expenditure in 2003.

Your Board's revised level of non-capital expenditure for 2003 is €470.840m (including the 2003 Supplementary Estimate).

Outline details of the funding for services are set out at Appendix One. The approved expenditure level for 2004 notified to you above includes provision for technical and other adjustments of:

Non-Pay inflation factor of 2.8%

Sustaining Progress agreement in 2004

Benchmarking, 50% of the award

Parallel Benchmarking full year cost

Patient charges, including A & E

Drugs Payment Scheme increase in threshold

VFM Targets

Budget Day funding

Your Board's service plan should be drawn up within the parameters above for the year 2004.

5. Funding of Initiatives Under Health Strategy — Quality and Fairness

Reference has already been made to the need to review all programme spending to secure efficiencies and improve effectiveness. Apart from the specific service priorities identified above, the overall policy framework which health boards/ERHA are asked to address in preparing Service Plans for 2004 is that set out in the Health Strategy. By continuing to shape services along the lines advocated in the Strategy, it should be possible in the context of an overall investment in excess of €10 billion in 2004 to make further progress towards the goals and objectives outlined in the Strategy. Further mention is made in paragraph 10.2 regarding reporting of Health Strategy actions by way of regular returns.

6. Control of Expenditure and Management of Service Plan

The Minister, as in 2003, wishes to emphasise the critical need for and importance of an effective expenditure control framework and active management of Service Plan delivery. Both requirements put a particular onus on the role of local managers delivering services efficiently and within agreed budgets. Therefore, the structures operating in 2003 should be reviewed and, where appropriate, strengthened in order that the system is fully responsive and effective across all programmes and care groups. Similar systems should be in operation within agencies funded by your Board.

7. Reporting on Expenditure and Service Plan

The arrangements introduced by the Minister for Finance in 2003 for reporting progress on expenditure will continue in 2004. The Minister for Finance will again publish cash and expenditure profiles as submitted by Departments, and monitor these against actualresults.

To enable the Minister for Health and Children to comply with the Government reporting arrangements, the following information sets and timeframes will again be required from your Board:

·Cash Profile: you are requested to prepare a monthly cash profile, aligned to your service plan expenditure, taking fully into account the trends in expenditure and the impact of delivery month by month, including the contingency element, consistent with the overall total cash advised. You should note that this profile will form the basis on which cash will be made available to you on a monthly basis throughout 2004. The profile must provide for the full release of funding included in your Board determination for the GMS, including funding due in relation to 2003, if any. In addition, funding of voluntary and other agencies providing services to your Board must be fully included within the monthly profile.

The cash profile must be submitted by 5th January 2004 for review by the Department before submission to the Minister forFinance.

· IMR: having regard to the circumstance facing the system in 2004 and the absolute necessity to support budget holders, the CEO and his management team, with information to allow the system to respond speedily and effectively to emerging events. The provision of timely and accurate information, both financial and non-financial will be crucial to the successful management of resources throughout the year.

In the first instance the IMR will allow the CEO and his management team and local management to take advantage of opportunities arising and where necessary provide the capability to address emerging difficulties at the earliest possible time.

The IMR, together with the CEO's commentary and the quarterly PI reports, are equally important within the Department in that they inform service and support units on trends in service delivery and specific pressures within the system experienced by individual Boards/Authority. In turn, they allow the Minister to be fully briefed and to appraise his colleagues in Government on performance overall. This is vitally important in the context of demonstrating accountability for resources secured and in supporting the case for continued investment.

To accelerate the use of the IMR at all levels as a management tool you are requested to make the necessary arrangements to provide the IMR, with commentary, to the Department by the 20th of the following month. I appreciate that this places additional pressure on senior management but believe it is justified by the need for timely and accurate information if managers are to be successful in managing their budgets. Your Board and agencies under your direction are therefore asked to put arrangements in place immediately in order to comply with the revised timescales.

8. Accountability of Chief Executive Officer

You will be aware that section 9 of the Act places specific responsibilities on a chief executive officer in regard to service plans and financial accountability. In that context it is important that the chief executive officer takes personal responsibility in regard to the reporting arrangements set out in this Letter of Determination on activity, personnel and financial information. It is critical that the process of reporting to the Department includes a clear statement by the chief executive officer of the immediate steps he is taking to manage emerging difficulties in these areas.

Where a CEO delegates to an identified officer of the Board the authority, accountability and responsibility for specific services, the officer must be made explicitly aware by the CEO of what is being delegated. The CEO must take personal responsibility for ensuring that this is the case. However, this does not dilute, in any way, the CEO's functions under the Act, including Section 9, and those functions therefore remain fully in place. The parameters of control and reporting described in this Letter of Determination apply equally to the CEO and those other officers of the Board to whom authority, accountability and responsibility have been delegated. That delegation must ensure that the officers have the authority to act immediately to address problems which could adversely affect the budgetary position, including any unfunded activity increases or unapproved increases in staffing numbers.

9. Indebtedness Level

Section 8 of the Act requires the notification of the approved level of indebtedness, arising from this determination. This figure is €39.654m for your Board in 2004. A more detailed letter on indebtedness and working capital requirements will issue shortly. The provisions of the Prompt Payment of Accounts Act, 1997 should be strictly adhered to.

10. Service Plans

10.1 Submission of Service Plan

Under the provisions of Section 6 of the Act, each Board must adopt and submit a Service Plan to the Minister. The Service Plan is the benchmark against which your Board's expenditure, output and progress will be assessed during the year. In accordance with sub-section (6) of this section of the Act, the Board is required to take account of the policies and objectives of the Minister, and of the Government.

It will be necessary to complete all matters relating to your Board's Service Plan as a matter of urgency and, in any event, not later than 42 days after receipt of this letter.

The Department will be working with the HeBe project team to further develop the service planning process during 2004. In this context a standardised quarterly progress report format will be agreed to be used in 2004 in conjunction with PIs and IMRs to monitor Service Plan delivery in 2004.

The Board's Service Plan should be submitted in hard copy to the Minister. In addition, the plan should be e-mailed as one document (in PDF format) to the e-mail address:serviceplan@health.irlgov.ie.

10.2 Format and Content of Service Plan

The Department welcomes the CEOs' decision to adopt the standardised National Service Plan Template for the 2004 Service Plan. The template, which is based on best practice, will assist in the monitoring and evaluating of Service Plan delivery and is in keeping with the Government's Programme of Reform.

It is essential that your Service Plan is realistic and achievable. It should reflect and be grounded in the Strategy, referencing all relevant Strategy actions. You will be aware that the Minister is required to report to the Cabinet Committee on the Health Strategy on a quarterly basis regarding ongoing progress in the implementation of the Strategy and the Health Service Reform Programme. The Service Plan and its associated periodic review reports and meetings are the primary reporting mechanism which facilitate the monitoring of progress in the implementation of the Strategy.

In accordance with section 10 of the Act, if your Board anticipates, on the basis of the information now available, incurring any excess or credit on expenditure in 2003, your service plan must clearly include provision for charging the full amount of such excess or credit to the Service Plan for 2004. An excess expenditure in 2003 must be a first charge on the resources available for 2004. In the case of an excess, your Board should detail, as part of its service plan, how it proposes to recover the excess expenditure in full and bring current expenditure back into line. Any significant excess being brought to account at this stage will,inter alia, raise questions regarding the reliability of your Board's regulatory and reporting systems.

10.3 Documents to accompany your Service Plan

When your Board is submitting its Service Plan to the Minister, please also submit whatever operational details you feel would be helpful in assessing your Service Plan, together with an estimated position at the end of 2003 for your Board in relation to IMR information, the completed Health Strategy PI reporting template referred to in paragraph 11, and also (where possible) PIs. Budgetary statements by care group should accompany or be part of the Service Plan as far as is practicable at thisstage.

10.4 Review of Service Plan

Whilst it is intended that the Service Plan be used throughout the year along with IMR and PI reports as a basis to guide the monitoring and evaluation of Service Plan delivery (and help to identify emerging trends so that action can be taken at the earliest possible time), there will also be periodic formal Service Plan reviews during 2004. For each review of 2004, a specific report will be required (to complement the IMR and PI returns) elaborating on the position regarding the implementation of new developments as well as on core service delivery targeted in the Service Plan.

11. Performance Indicators

The Health Strategy emphasises the necessity for service planning and delivery to be based on high quality, reliable and timely information. In this context it is critical that PI reports are submitted by the 20th of the month following on from each quarter. The PI Reports should be sent in hard copy to the Secretary General of the Department and electronically toserviceplan@health.irlgov.ie using the agreed template. The PI data together with the IMRs will better enable monitoring and evaluation of the on-going position in relation to your Board's Service Plan. Commentary should cover areas where hard quantitative PI information is not available in full or where the quality of the information may not be optimal. With regard to PIs for Materials Management, you should note that as for 2003, the five most important PIs from the IBM report should be reported on during 2004.

The Minister wishes to acknowledge the good work that has been achieved to date in developing and reporting on the national set of PIs and welcomes the CEOs' decision to share PI data. You will be aware that the PI reports will assist in monitoring progress of the Health Strategy and in reporting on progress to the Cabinet Committee. It is critical that the quarterly reports are as complete as possible and that the quality of the data is maintained.

A number of Strategy actions fall outside the National PI set as they do not readily adapt to this form of measurement. A separate reporting template, which was forwarded to your Board on 17th November 2003, has been devised to facilitate the monitoring of progress in the implementation of these actions. Your Board is required to submit the completed template for 2004 with your Service Plan.

12. VFM strategies

12.1 New Technology Assessment

New Technology Assessment has an increasingly central role to play in the use of VFM strategies and you are asked that every effort continues to be made to seek out assessments of new technologies to guide their introduction so that tighter targeting of the use of technologies, combined with appropriate protocols, will ensure that new technology is employed only for those cases where clear demonstrable benefits exist and resultant costs are justified. In this regard, it is proposed that the health boards and agencies, pending the establishment of the Health Information and Quality Authority, should continue the development of a common approach to the assessment of new technology under the auspices of HeBE.

12.2 VFM Targets

The attainment of better value-for-money through effective and efficient use of resources continues to be a critical objective for all health agencies. The Government have decided that health boards and agencies must continue to pursue VFM during 2004 andyour determination reflects an appropriate amount of a VFM target which is to apply across the boards to both pay and non-pay areas. In developing your approach to achieving that target, you should also take into account possibilities that will emerge from the Procurement Strategy for health services, which is being completed under the aegis of HeBE.

It is critical that all health agencies use the skills and structures now in place to maximise co-operation and actively pursue value-for-money in materials management, particularly in the development of national protocols and contracts. The level of co-operation between boards to achieve greater VFM will be closely monitored by the Department throughout 2004.

13. Health Service Modernisation Programme under Sustaining Progress

The Department is concerned to ensure that the many positive results now being achieved at pilot stage in addressing the specific modernisation objectives set for the health services under Sustaining Progress will be translated into a more positive general impact on the health system overall. At a recent meeting of the Health Service National Joint Council, the trade union side gave a commitment to maintaining the momentum for change and modernisation and to moving the changes being piloted towards more widespread adoption. Both sides accepted the need for a more readily transparent assessment and verification process.

It is essential that clearly defined targets, against which further progress can be incrementally measured, be set over the remaining phases of the agreement. Accordingly, your Board should include in its service plan, specific targets in relation to Sustaining Progress under the following fiveheadings:

— Customer Service;

— Industrial Relations Stability;

— Performance Management;

— Reform; and

— Value for Money.

These are the five priority areas in which the Health Service Performance Verification Group (PVG) requires health agencies to achieve real and verifiable progress between now and 1 June 2005.

The Health Service National Partnership Forum will provide guidance to health boards in relation to this matter.

14. Pay Recommendations of the Public Service Benchmarking Body

Funding is being allocated to your Board in respect of the second (50%) phase of the of the pay awards recommended by the Public Service Benchmarking Body (PSBB) and due for payment under Sustaining Progress for payment from 1 January 2004. Consistent with standard practice, this funding is inclusive of the general pay round increases agreed in Sustaining Progress.

The allocation for benchmarking is based strictly on the funding allocated to your Board for payment of the first phase of the PSBB's recommendations earlier this year. In line with the recommendations of the Commission on Financial Management and Control Systems in the Health Service, the Department will in 2004 be updating the costing model for the Health Service developed collaboratively with the health boards for benchmarking. The information requirements arising in this context will be communicated to your Board in due course.

As you are aware, payment of the benchmarking awards is strictly conditional on the successful completion of the performance verification process detailed in Sustaining Progress. In accordance with section 26.5 (x) of the agreement, the Health Service Performance Verification Group has recently informed me of its conclusions in relation to whether the level of progress achieved since 1 July 2003 in relation to the commitments set out in Sustaining Progress warrants the payment of the relevant pay increase(s). Sanction arrangements arising in respect of payments due from 1 January next will be communicated to your Board very shortly.

15. Parallel Benchmarking

Funding is being allocated to your Board on an ongoing basis in respect of the pay awards from the first two phases of the parallel benchmarking process for craft and non-nursing grades (including pensioners) employed in the health service (and alsoeligible personnel employed in Section 65 agencies. The funding is also inclusive of general round increases agreed under Sustaining Progress for 2004.

The allocation is based on: the costings recently submitted to the Department by your Board; the increases in basic pay set out in the revised pay scales for the grades; information on gross pay (i.e. overtime/premiums) supplied for the benchmarking costing model; and employment levels in wholetime equivalent (WTE) terms recorded in the Health Service Personnel Census. Arising from this process, a number of issues remain to be clarified with some agencies.

A letter of sanction will issue to you very shortly in respect of the first (25%) phase of the awards due for payment with effect from 1 December 2001.

I understand that the implementation protocol setting out the conduct of the performance verification process for these grades in respect of the second (50%) phase of the awards was recently furnished to your Board by the Health Service Employers Agency.

16. Employment Control 2004

Continued strict adherence is required to the current framework for employment control in your Board as detailed in the Department of Health and Children Circular No. 6/2003 issued in January 2003.

You will be aware that the Minister for Finance indicated in his Budget Statement in December 2002 that a reduction of 5,000 is planned in the numbers employed in the public service over the period to end-2005. In this regard, you have already been notified of the contribution of your Board to the overall reduction in numbers to be achieved in the health service by end-2003. A further reduction of 200 posts in the national employment ceiling is to be achieved by end 2004, in respect of which the contribution of your Board will be on the same basis as the 2003 adjustment. Your service plan should take into account this further reduction in the authorised ceiling.

The reduction in the regional employment level in 2004 is to be achieved by maximising the benefit of natural wastage, through detailed scrutiny of replacement recruitment in the health service and non-filling of any non-essential posts with specific emphasis on posts that are not directly involved in the delivery of front-line services. It is intended that this approach will, as much as possible, minimise any adverse impact on existing levels of service to the public in key areas.

It is essential that the implementation of the arrangements outlined above are undertaken in a manner consistent with agreed protocols for consultation with staff representatives at local level, and in conformity with the provisions set out in Sustaining Progress for the maintenance of a stable industrial relations environment.

The implementation of the reduction in public service employment levels in the health service will be monitored on a quarterly basis. Accordingly, the quarterly employment report submitted to the Department should also identify the specific posts and the location of those posts that have not been filled in order to accommodate the required adjustment in the regional employment ceiling.

In the context of the Determination for 2004, your Service Plan should therefore confirm that employment levels associated with the activity levels set out in the Service Plan for your Board will conform to ceiling requirements.

In 2004, no posts above the authorised ceiling may be filled. In these circumstances, the employment requirements of specific services, consistent with planned activity levels, should be met through the management of your approved employment complement, including the appropriate staffing mix and the precise grades of staff employed in the approved workforce.

To expedite financial clearance, your service plan should clearly indicate and list medical consultant posts (new, replacement and/or restructured) for which you intend to seek financial clearance during 2004, before making application to Comhairle na nOspidéal.

Your Board's adherence throughout the year to its approved employment ceiling will require to be confirmed on a monthly basis through information furnished in the IMR. The Department through the IMR and also by means of the quarterly employment reports will monitor compliance by your Board with the employment control measures. Hence, it is essential that the quarterly employment report is comprehensive and accurate and submitted to the Department on a timely basis.

Arrangements for formally validating at CEO level the employment information supplied by your Board continue to be those as set out in [section 8] above.

17. Pay Costs

Your Board should also, having regard to the totality of pay resources available, make adequate provision for pay costs in 2004, to be met within the existing allocation, having regard to:

— the present numbers employed;

— the appropriate balance between pay and non-pay costs;

— the projected cost of minor claims expected to arise during the year.

18. National Projects PPARS/FISP

Significant resources, both capital and revenue, have been made available to allow for the development and full implementation of the National PPARS projects and for the commencement of the FISP project. The Minister recognises the importance of these projects in the effective management of resources across the healthcare system. You are asked to ensure that the projects are given the full commitment required in terms of funding and appropriate staffing to ensure that the implementation timescales are met and that the full benefit of this significant investment is achieved. A significant increase in the Capital IT funding is available for rollout of both of these major projects.

19. Development of Human Resource Management and Implementation of the Action Plan for People Management

The Service Plan for your Board should include details of the full range of measures which it is intended will be undertaken by your Board in 2004 to implement the specific actions detailed in the Action Plan for People Management (APPM) and to strengthen the capacity for more effective human resource management in the health service, in line with the objectives set out in the Health Strategy.

20. Social Inclusion

You will be aware of the importance accorded in the National Health Strategy to social inclusion, in particular to Action 18 which has deliverables relating to reducing health inequalities in line with the key targets set out by Government in its review of the National Anti-Poverty Strategy(Building an Inclusive Society: Review of the National Anti-Poverty Strategy under the Programme for Prosperity and Fairness).

Social inclusion should be a major consideration in framing the Service Plan and the Plan should set out the way in which the various actions in it address this. Actions to develop services in line with RAPID and CLÁR proposals must continue to be prioritised in 2004. The Service Plan should therefore clearly indicate the actions which further the implementation of these programmes as well as the wider social inclusion agenda wherever possible. RAPID and CLÁR projects should be clearly described as such. The boards should include clear statements as to the arrangements being put in place to ensure maximum coordination with other public service agencies involved and details of health agency participation in relevant management structures (for example in relation to City/County Development Boards and related bodies).

21. Conclusion

To assist your Board to complete the matters addressed in this letter quickly, senior officers of the Department will be available if there are any matters requiring clarification. These queries should, in the first instance, be referred to Dermot Magan, Helen Minogue and Paula Monks, Finance Unit, (01-6354254, 6354293, 6354513) who will co-ordinate the Department's response to all health boards/ERHA. You are reminded to submit the cash profile by the date advised.

I wish to acknowledge the significant effort and commitment given by Chief Executive Officers and all other levels of management to the successful delivery of services and budget plans in 2003. I recognise that the management of Service Plans within approved parameters has proved challenging and has demanded consistent effort and commitment over the course of the year. Given the transitional nature of the period we are going through and the equally challenging budgetary position in 2004, I look forward to your continuing support and co-operation in providing leadership and managing the system to an equally successful outcome in the coming year.

Yours sincerely

Michael Kelly

Secretary-General

Appendix to letter

North Western Health Board

Revised 2003 Determination

The revised non-capital Determination for your Board for 2003 is €470.840 million.

2004 Non-Capital Determination

The non-capital Determination for your Board for 2004 is €495.674 million.

Acute Hospitals

Waiting Lists:

The Minister has decided to give a significant lead role to the National Treatment Purchase Fund in targeting reductions in waiting times for patients. In this regard Waiting List Initiative funding will no longer be allocated to health agencies on a once-off basis each year as previously had been the custom.

Over the period of the WLI the Department has given financial clearance to individual health boards to convert some long-term temporary consultant posts to permanent status which have been funded on a continuing basis through the WLI. The Minister has decided to put this element of WLI funding into base funding for the health agencies concerned beginning in 2004.

In this regard, the sum of €1.750m has been allocated to your board in 2004 in respect of those permanent consultant posts and associated support costs which are in place and will now become part of your base funding for 2004 and subsequent years.

Health agencies have identified staff and services which have been in place to support WLI activity and which have been funded by the WLI. The Department will be critically examining the information supplied by health agencies and a further communication will issue early in 2004 in this regard.

Health agencies should work closely with the National Treatment Purchase Fund in 2004 to ensure that waiting times for elective treatment are reduced.

Cost of Blood and Blood Products

There has been a significant reduction in the cost of clotting factor concentrate products used in the treatment of haemophilia. This, together with a projected decrease in the use of blood and blood products and the application in 2004 of the non-pay inflator to base allocations, should offset the proposed increase by the IBTS in the cost of platelets and red blood cells. Any board with net savings from these price adjustments should prioritise these savings to meet costs that may arise in implementing the EU Directive on setting standards of quality and safety for blood and blood products (2002/98/EC).

Civil Registration Modernisation

Additional funding of€0.069m is being made available on an ongoing basis to meet additional costs associated with your Board's revised Civil Registration staffing structure, as provisionally agreed and subject to the submission of a satisfactory service development plan, acceptable to An tArd-Chláraitheoir.

Winter Initiative

Additional funding of€0.660m is being set aside to meet the cost of recruiting the remaining 2 A and E consultants approved in your area under the Winter Initiative. This funding is based on your Board's estimate of the likely costs to be incurred in 2004 under this initiative. Drawdown of funding will be approved by the Department on receipt of confirmation from your Board that the additional consultants have been appointed.

Renal Dialysis Services

As part of a structured programme of investment in the development of renal services, additional funding of€0.250m is being made available to your Board in 2004.

Cancer Services

Additional revenue funding of€0.600m is being allocated to your Board from National Cancer Strategy funding to address service pressures in oncology/haematology, including oncology drug treatments.

HIPE & Casemix

Casemix:

Casemix analsis of costs and activity relating to the hospitals in your Board's area, which are participating in the National Casemix Programme, has resulted in an overall once-off positive adjustment of €1.065m as follows:

Hospitals

€m

Letterkenny

0.999

Sligo

0.066

TOTAL Once-off

1.065

The Casemix Unit of the department will be writing directly to you shortly with full details of the adjustment.

Adjustments should be applied to the hospitals from which the adjustment arises and these details should be clearly identified in your Service Plan.

HIPE/Casemix Staffing:

No resources for HIPE/Casemix staffing are being allocated to hospitals within your Board this year, as Boards who gain funding within Casemix may reallocate a portion of that funding, as appropriate, for Casemix Staffing. Casemix Unit will be writing to you directly in this matter.

Health (Amendment) Act, 1996 (Services for Persons with Hepatitis C)

A sum of €0.105m is being made available to your Board in 2004, on a once-off basis, in respect of the cost of providing primary healthcare services to those persons who hold a health service card under the Health (Amendment) Act, 1996, including provision for increased activity, services and costs.

Services for Older People

A sum of €0.833m will be available to your Board as follows:

Nursing Home Subvention Scheme

0.238

Personal Care Packages

0.125

Home Help Service

0.250

Elder Abuse Programme

0.075

Palliative Care Services

0.145

Mental Health Services

Funding in the amount of €0.050m is being allocated on a once-of basis to your Board in 2004, to:

S.T.E.E.R Ireland,

Community House,

2 Errigal Road,

Woodlawn,

Leterkenny,

Co Donegal.

Services to Persons with an Intellectual Disability and Those with Autism

The work of your Board to date in the detailed examination of the financial and governance arrangements of the major voluntary service providers in the physical/sensory disability sector is greatly appreciated. The review of outstanding issues relating to deficit funding claims by these organisations will be concluded in 2004. In the interest of greater equity and accountability, it is expected that your Board will exercise similar diligence in relation to the funding of voluntary organisations in the intellectual disability sector. Where significant funding is being made available to a voluntary organisation providing intellectual, physical or sensory disability services, this should be subject to the signing of an appropriate service agreement.

National Intellectual Disability Database

The National Intellectual Disability Database has a vital role in the planning and monitoring of service provision. The timetable for the provision of updated information in 2004 has been notified to each Health Board/Authority and it is vital, as stated in 2003, that this timetable is complied with in order to enable the Health Research Board to complete the necessary validation work and have data available for the Department in the autumn of 2004.

In addition to the need to adhere to the timetable as outlined above, health boards are requested to emphasise to the services responsible for the provision of information forthe database at local level the necessity to ensure that the information provided is accurate and reflects current service provision and where appropriate, future needs for each individual.

Total additional funding of €0.787m is being made available in 2004 for services to persons with intellectual disability and those with autism as follows:

€0.677m to meet the full year cost of the provision of residential services for emergency cases which arose during 2003 and day places;

€0.110m to meet the full year cost of residential and day services as per this Department's letter of 9th September 2003.

Budget Day Package

Additional funding as set out below is being provided to your Board in 2004 in respect of the provision of services to people with intellectual disability and those with autism.

Additional revenue funding amounting to €0.883m is being provided as follows;

€0.550m to meet costs associated with the provision of emergency placements in 2004;

€0.333m to provide additional day services, with particular reference to the provision of day places, including rehabilitative training places, for those young adults who will be leaving school in June 2004.

A detailed account of the expenditure of this funding, including the National Intellectual Disability Database Personal Identification Number of each person placed in these services and the costs associated with each placement, must be submitted to this Department.

The Department will be in contact with your Board in relation to the full year cost implications of these services.

Services for People with Physical / Sensory Disabilities

A sum of €0.603m is being made available to your Board in 2004 towards core funding of these services as follows:

Agency/Service

€m

Priority service pressures as identified at local level (to include respite, home supports, services for people with significant disabilities, support services for children with disabilities, aids & appliances etc)

0.170

Alleviation of the under resourcing of the voluntary organisations

0.156

Continued roll-out of the NPSDD (including the introduction of a management structure for the NPSDD and the NIDD) — once-off funding

0.257

Cheshire Ireland Sick Pay Scheme

0.020

Total

0.603

Child Care Services

Additional funding of €0.478m is being provided for the Child Care Services. The details are outlined in the table below.

€m

Foster Care Allowance

0.250

Child Care Services — Legal Costs

0.228

Total

0.478

Dental Treatment Services Scheme

An additional €0.348m revenue funding is provided as a consequence of fee increases of 5.2% and 4.8% from the 1st of January 2003 and the 1st of January 2004 respectively. Your Board's core DTSS budget has also been increased by a non-pay inflator of 2.8%.

Community Health Services

Community Optometric Services (Adult)

€0.081m is being provided on a once-off basis in 2004 in respect of the Adult Community Optometric Schemes. This sum is provided to assist your Board in providing services under the Schemes.

A further €0.195m is being provided on a once-off basis in respect of the increased costs/demands on the Adult Community Optometric Schemes arising from the dual eligibility agreement with the Department of Social and Family Affairs.

€0.110m is being provided on an ongoing basis in 2004 to meet the full year costs of the Pilot Mobile Diabetic Retinopathy Screening Service. Progress reports should continue to be submitted to Community Health Division at three — monthly intervals. Community Health Division will write to the Board separately regarding arrangements for evaluating this pilot scheme.

Food Control

A sum of €0.020m has been included in your Board's Determination in respect of the Food Control Service on a once-off basis.

Primary Care Strategy

An additional sum of €0.110m is being provided on an ongoing basis in respect of implementation of the Primary Care Strategy.

This may, if necessary, be used in the first instance to meet revenue costs associated with the primary care team which is being established in Lifford, Co. Donegal.

In line with previous correspondence on this issue, the additional funding may also be used to support initiatives to give effect to multidisciplinary teamworking on a more widespread basis. This may include: reorganisation of resources within primary care and community services, mapping locations for primary care teams and networks, and facilitating the development of collaboration/co-ordination initiatives between providers of primary care services and also with providers and users within the wider health system.

A sum of €0.015m is being provided on a once-off basis in respect of administrative support for the sub-group of the Primary Care Steering Group chaired by Mr Tom Kelly, Assistant CEO. The continuation of this allocation in future years will be reviewed in the light of the support requirements of the group involved.

Public Health Doctors

A sum of €0.244m is included in your Board's 2004 determination to cover the full year cost of the pay increases awarded as part of the Public Health Doctors' 2003 Agreement. A further letter will issue in 2004 regarding implementation of the remaining aspects of the Agreement including upgrading posts and filling the new Principal Medical Officer posts.

Nursing Issues

A sum of €1.126m (of which €0.626m is once-off) is included in your Board's 2004 allocation as follows:

Service

Amount €m

Nurses Pay — Accident and Emergency Circ 25/02 and 34/02 (ongoing)

0.500

Transition of Pre-Registration Nursing Education to a Degree Programme Project Manager Posts (once-off)

0.060

Sponsorship Scheme for Public Health Service Employees wishing to train as Nurses (once-off)

0.135

Maintenance Grants for Pre-registration Nursing Diploma Students (once-off)

0.031

Fees Initiative for Part-Time Nursing Degrees (once-off)

0.200

Fee Support for Specialist Nursing Courses (Circs 150/2000 and 47/2001) (once-off)

0.200

Total

1.126

Revenue Cost of IT

The Department has adopted a policy of enterprise wide ICT systems with a view to achieving best value for money from all ICT related expenditure. All health agencies are expected to comply with this policy. A further communication will issue in relation to this policy and its implementation early in 2004.

Health Promotion

A sum of €0.040m is included in your 2004 determination on a once-off basis towards the Community Development Project to be undertaken by the Health Promotion Department of your Health Board.

Cardiovascular Health Strategy

An allocation of funding under the Cardiovascular Health Strategy will be made during 2004 in relation to the National Heartwatch Programme in General Practice having regard to board's requirements and the evaluation of this programme during 2004.